Agenda item

To consider the Internal Audit work undertaken and the assurance given on the adequacy of internal controls operating in the systems audited for the period September to November 2014.

30.1           The report of the Policy and Performance Group Manager, circulated at Pages No. 39-77, summarised the work undertaken by the Internal Audit team for the period September to November 2014.  Members were asked to consider the audit work completed and the assurance given on the adequacy of internal controls operating in the systems audited.

30.2           Members were advised that full details for the work undertaken during the period were attached at Appendix 1 to the report and the Policy and Performance Group Manager confirmed that the team was currently on target to achieve the minimum 90% completion of the Audit Plan by the end of the financial year.  A list of audits within the 2014/15 Audit Plan and their progress to date could be found at Appendix 2 to the report.  He indicated that the Internal Audit team was very small comprising only two members of staff, one of whom would be starting maternity leave at the end of January 2015, and action would need to be taken to ensure that the service remained adequately resourced.  It was noted that details of all audit recommendations had been included within the monitoring report at Appendix 3 to help provide the Committee with an overview of the work undertaken and the implementation of audit recommendations.  The Policy and Performance Group Manager went on to confirm that no incidents of fraud, corruption or theft had been reported during the period.  At the Audit Committee meeting on 24 September 2014, Members had been informed that there had been a request from Tewkesbury Town Council for its internal audit work to be undertaken by the Borough Council’s Internal Audit team.  It had been estimated that 5-7 days would be required to carry out the work; however, following an initial meeting with the Town Clerk to discuss the scope of the audit, it was considered that 10 days would be more appropriate.

30.3           In terms of the audits which had been completed during the period, Members were advised that the capital accounting audit had confirmed that there was a good level of control in the approach and a good level of scrutiny in relation to all capital grants which were assessed by a Member Working Group.  The capital grants criteria did require updating and a new scheme would be provided for 2015/16.  The asset register which was maintained within Financial Services had been found to be accurate, although it was recommended that a periodic check be carried out against the land terrier in order to identify any omissions as part of the year-end review. In respect of asset valuations, the contract whereby asset valuation advice was provided to the Council had now expired and it was therefore recommended that it be retendered. 

30.4           With regard to the audit on ICT – Public Sector Network (PSN) Compliance, Members were reminded that the Business Transformation Group Manager had attended the last meeting of the Committee to explain PSN to Members.   The audit had included following-up previous audit recommendations within the PSN Compliance audit 2013/14 as well as looking at the 2014/15 self-assessment.  There were some procedural actions outstanding, for instance, the completion of personal commitment statements for all PSN users and the completion of a business case for all users of removable media devices.  In order to comply with PSN requirements, the Council must ensure that all users had undergone a Baseline Personnel Security Standard (BPSS) check.  Members were informed that the Council’s Senior Risk Information Owner had now been identified as the Deputy Chief Executive, however, it was recommended that this be formalised by the Corporate Leadership Team and that the responsibilities of the role be defined.  This would be done via an Information Governance Assurance Framework and a report would be taken to the Executive Committee.  An issue in respect of access to the ICT server room had now been resolved and access would only be granted by the Property team at the request of the ICT Manager.  The 2014/15 PSN Code of Compliance had been completed and returned, however, a response had been received stating that the submission had been unsuccessful as five PSN users were yet to undergo the BPSS check.  There was a three month window for multiple resubmissions and this issue could be easily resolved within that timeframe.  A Member queried why the five users had not had the BPSS check and the Policy and Performance Group Manager indicated that he would need to clarify the reason with the ICT Manager.  He confirmed that the Council had until the end of January 2015 to gain PSN approval.

30.5           Members were reminded that, at the March meeting of the Audit Committee, Grant Thornton had indicated that National Non-Domestic Rates (NNDR) would not be subject to external audit and Members had sought assurance that this would be picked up by Internal Audit.  As such an additional audit had been included in the Audit Plan which had shown that there was a satisfactory level of control.  In respect of collectable rates, procedures were currently being established and documented concerning the identification of renewable energy resources; the value on the return was currently a nil value.  It had been noted that the policy in relation to discretionary relief needed to be updated to reflect the Localism Act 2011 in that the relief was now payable to all ratepayers.

30.6           In relation to the audit of the business flood grants, Members were advised that local authorities were responsible for administering the flooded business support scheme in accordance with guidance provided by the Government.  To date, £124,000 of the £475,000 available had been allocated and it was therefore recommended that a decision should be made in relation to how the remaining grant monies would be allocated to businesses within the Borough.  A submission would be made to the Government to see whether the money could be used in a different way.  With regard to the National Fraud Initiative (NFI) audit, the Policy and Performance Group Manager indicated that a data matching exercise was carried out every two years which involved matching data held on Tewkesbury Borough Council systems with that held by other local authorities and matching internal payments to suppliers to identify fraud and error.  In addition, a further matching exercise between Council Tax and Electoral Register data was now completed on an annual basis which helped to identify people who were claiming single person occupancy when they were not entitled to do so.  There was a good level of assurance that the outcomes of the 2013/14 NFI data matching exercise had been progressed and this would be considered in more detail at Agenda Item 10.

30.7           Members were advised that there was a rolling programme which audited the accuracy of local performance indicators reported to the Overview and Scrutiny and Executive Committees.  There was a satisfactory level of assurance that systems were in place to accurately calculate the figures for the local performance indicators in respect of the Revenues and Benefits Service and Environmental and Housing Service which had been reviewed during the audit.  A Member noted that the percentage Council Tax collected had been reported as 57.28%, and that this had been fairly stated, however, she felt that this seemed quite low.  In response, the Policy and Performance Group Manager clarified that this was the six month figure. With regard to the Council Tax audit, there was a good level of control for most objectives although a number of recommendations had been made around inspections of new homes which were not currently recorded on the Northgate system.  A Member questioned whether Officers liaised with builders and developers to ensure that new homes did not slip through the net in terms of collecting Council Tax.  The Revenues and Benefits Group Manager explained that Officers monitored the proposals in the planning systems and went out to meet with developers to discuss likely dates of completion.  The law allowed the Council to serve a completion notice based on when it was felt that the property could be finished and, therefore, the date from which Council Tax would be payable.  The notices could give up to 13 weeks to complete the development.  The housing market was fairly buoyant and it was often the case that someone would move into the property before a completion notice was required which meant that Council Tax was chargeable straight away. He provided assurance that empty properties were visited regularly.  A Member went on to query whether Officers were reliant on people informing the Council that they had moved into the property, i.e. whether Officers were active or reactive.  The Revenues and Benefits Group Manager explained that, if the Council was aware of an empty property, this would be visited by an Officer to confirm that it remained empty.  Properties were monitored by an Officer who had a monthly round to check whether people were living in the ‘empty’ properties.  If a bill was sent out and no response received, or the paperwork was ‘returned to sender’, an investigating officer would be sent out to establish the situation.  Members were advised that failing to notify the Council of moving into, or owning, a property was not a specific offence unlike with Housing Benefit where criminal proceedings could be started if someone failed to inform the Council of a change in circumstances.  There were some low level administrative procedures which could theoretically be applied but these were unlikely to solve the problem and, as such, it was important that Officers were on top of the situation concerning empty properties within the Borough.

30.8           Members noted that a lot of work had been carried out in relation to the contract registers, as part of the corporate improvement work undertaken by Internal Audit.  There was an action within the Council’s Procurement Strategy that contract registers should be in place for each service grouping and this had been given greater emphasis by the Local Government Transparency Code 2014 which would be considered at Agenda Item 11.  Internal Audit had also played a proactive role on the project team which had looked at the processes and systems within Revenues and Benefits.  Work undertaken included process mapping, equalities analysis and process challenge whilst ensuring fundamental internal controls remained.  The improvement programme was beginning to have an impact with the number of days to process claims being reduced.

30.9           Having considered the information provided it was

RESOLVED          That the Internal Audit Plan Monitoring Report be NOTED.